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Thu 17 Oct 2002 04:00 AM

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Maple dawn rises over the Gulf

In an exclusive interview with Arabian Business, the Canadian Secretary of State spoke about Canada's position regarding Iraq and his country's ambitious goals to become a major economic partner in the Arabian Gulf.

Canada is forcefully moving to raise its profile and strengthen economic ties in the Arabian Gulf and the Middle East. That’s the message Canadian Secretary of State Gar Knutson wanted to get out in an exclusive interview with Arabian Business today.In a show of unprecedented support to promote Canadian companies and interests, a senior delegation of Canadian officials including the secretary attended a signing ceremony between two high tech companies from Canada and Saudi Arabia. Canada foresees Canadian involvement in oil and gas initiatives across the Arabian Gulf, the secretary told Arabian Business on the sidelines of the ceremony. “Some of our major companies are with us on this delegation, for example BC Gas is putting in an application for a gas project, SNC Lavolin has just received a contract to build a US $150 million gas plant in Oman. They very much see that as a break through for the region and would like to explore the opportunities that are here. Our biggest oil company in Canada, EnCana, is working on a project in Qatar, BECO Engineering has interests in the UAE, and Nexen is the major gas producer in Yemen.” The secretary said a number of Canadian companies are looking to expand their presence in the UAE and the wide region.If Canadian companies succeed in getting a chunk of the oil and gas market business, this could very well be a first of its kind, as American companies have largely dominated the sector to date. “We are working closely with the CABC to create a broader awareness of the opportunities and we want to develop two way trade and investment partnership with the UAE. The Arabian Gulf region is an important market offering tremendous business and partnering opportunities,” said the secretary.Saudi Arabia has called on Western oil multinationals, to submit final proposals on the US $25 billion industrial mega-project by the end of October.Companies selected for the project would explore and produce gas in the kingdom, which has estimated gas reserves of 224,000 billion cubic feet. The companies will reportedly earn an annual rate of return of 16 to 18% over the next 30 years, on the petrochemical plants, power stations and desalination plants that they build as part of the deal. But some of the companies are concerned that they won’t find enough gas to turn a profit Exxon Mobil, Shell, BP, TotalFinaElf, Conoco-Phillips, Occidental and Marathon were chosen last year to invest in the Saudi gas projects.With the price of oil hovering at US$30 a barrel, analysts and economists have predicted that a war on Iraq could have serious repercussions on the world economy and the oil industry. Political stability underpins foreign direct investment flows into the region. The Canadian secretary agreed that a negative turn of events would affect the way Canadian businesses view the region and possibly affect Canadian interests. “I think it [an attack on Iraq] has the potential to affect the way Canadians view the region and it is part of my job that people know the facts. That while there may be a war going on in Iraq; this area of the world that we are in right now is quite stable. It is very prosperous and there is opportunity here. I will encourage Canadians to get over their initial misconceptions and come and see for themselves.”When asked on how Canada viewed the situation in Iraq the secretary said, “Canada has been quite clear in its stance. The Prime minister was one of a number of world leaders to encourage the Americans quite strongly to go through the United Nations process, to work with the Security Council and avoid taking unilateral action. Canada is still of the position that the UN process should be allowed to take its course. We would hope, quite sincerely that Iraq cooperates fully with the weapons inspectors. The Prime minister has said that we would be willing, if the United Nations namely through the security council, decided to launch an armed intervention that Canada would be willing to participate.”On the business front, Canada is unrelentingly ambitious in its pursuit to establish and solidify its economic ties in the region. David Hutton, Canada’s Ambassador to the UAE said his country’s exports are $190-200 million. “What I would like to do is create an atlas of Canada’s presence here,” said the Hutton. According to the Canadian delegation, Canada’s investment in the Gulf is approaching $100 million and it sees a tremendous opportunity to take that into the hundreds of millions of dollars, and in the billion dollar range when Canadian companies participate in the oil and gas projects. The secretary said that Canadian companies would be most interested in building on their current successes. “We have done quite well over the last number of years making investments in the education field; there is a US$ 500 million project between one of our colleges in Canada and the government of the Qatar.” According to the secretary, Canada will be dominant educator for university level education in Qatar within a number of years. Currently, 10,000 Canadians live in the Arabian Gulf.“The successes we have had in the oil and gas I think will lead to further interest in the region whether it is Nexen in Yemen or EnCana,” added the secretary.SLM Soft, a Canadian high tech company, is in talks with a number of banks about introducing its bill-payment technology to those banks. Aerospace company Bombardier is interested in expanding its presence in the Gulf. Emirates airlines, the UAE’s flagship air carrier, has approached Canada about starting a service from Dubai to Canada, according to the secretary. Walter Stutga, a member of Canadian parliament and chairman of committee on science and technology said, “There are a lot of Canadian businesses that want to come here. We have found the gold mine and we are here.”The Canadian delegation touring the GCC plans to make stops in Oman, Saudi Arabia, Kuwait, and Qatar.

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